The statistic reveals the IT functions most commonly outsourced by IT leaders worldwide, as of 2017. In 2017, software application development was outsourced by 64 percent of respondents.

This statistic shows the global market size of outsourced services from 2000 to 2019. In 2019, the global outsourcing market amounted to 92.5 billion U.S. dollars.

The global outsourcing market - additional information

The revenue of the global outsourced services industry has been unsteady over the last few years. In 2016, the industry market size dropped to 76.9 billion U.S. dollars, the lowest figure seen in a decade. The largest share of revenue for this industry came from the Americas, followed by Europe, the Middle East and Africa. A much smaller share of global revenue came from the Asia Pacific region.

Outsourcing involves the contracting out of business processes to third parties, usually in order for the business to avoid certain costs, such as taxes. In 2019, business process outsourcing contributed a much smaller proportion of the industry’s global revenue than information technology outsourcing, generating 26 billion and 66.5 billion U.S. dollars respectively.

Other outsourcing segments within the global industry include business services, energy, healthcare and pharmaceuticals, retail, travel and transport, and telecom and media. In 2016, the leading driver for using outsourcing services, according to business executives, was to cut costs. Other drivers included, enabling focus on core business and solving capacity issues.

As per Cognitive Market Research's latest published report, the Global Offshore Software Development Market size will be USD 1,12,609.5 Million by the end of 2030. The global Offshore Software Development Industry's Compound Annual Growth Rate will be 15.2% from 2023 to 2030.

The North America Offshore Software Development market size is projected to reach at USD 25,112.1 Million in 2028.

What is Driving Offshore Software Development Market?

Expanding IT services in every sector 

IT or the information technology sector plays a huge role in the development of any country. This sector supports to produce services maintenance and repairs, training, or consulting. IT sector plays the crucial role in small and medium enterprises (SMEs), large enterprises. Information technology services are those services used by organizations in creating, managing, and delivering information as well as assisting with other business functions. These services include consulting, software development, systems integration, deployment and support, training and education, and hosted and outsourced IT services.

Global IT services market is expected to reach 853-billion-dollar mark by 2021, up from 737 billion U.S. dollars in 2017. North America is the largest regional IT services market, accounting for almost half of the global market.

IT services are used in every sector such as banking, communications, wholesale and retail trade, all professional services such as engineering, computer software development, and medicine, non-profit economic activity, all consumer services, and all government services, including defense and administration of justice. To providing the right investment banking training and courses, the IT sector of a country plays a huge role.

According to one study, there will be over a million software companies in the world within the next 10 years. Most of them are in America and Europe. Competition is extremely high and operational costs are always climbing, and talent is getting scarcer by the day. Offshore software development services are thus, risen as a solution for Western businesses who are looking to get ahead in the crowded and expensive marketplace. This is the significant strategic move as western countries are lacking engineers and jobs has become expensive as their skills are incredibly in demand.

According to recent research conducted by Indeed, the US software job market currently faces a 472K tech talent shortage with 9 out of 10 business owners struggling to find and hire IT professionals. Offshore software development hires a dedicated software development team and opens a new office called an offshore development center in another country. Hence, the main reason companies are looking to build offshore teams and engage developers in countries like India, Singapore, because of low cost and high availability.

Growing knowledge and necessity of cybersecurity is propelling market growth

Restraints for Cryogenic Piping Market

Concerns associated with data security & protection

Opportunities for Offshore Software Development Market

Increasing demand for cutting-edge skills


Growing development in emerging economies

Introduction of Offshore Software Development:

Offshore software development is a process in which companies hire software developers located in a foreign country and their service helps the organization in resolving challenges faced in the business. The offshore software development indicates that company of providers is located in a foreign country are away from their location facing different time zone difference.

There are many benefits of using this offshore software development service which ensures unique customer experience, helps in resolving business difficulties with the best class software. The organizations are adopting the offshore software development outsourcing service due to the low-cost associated with it compared to in-house or onshore service. The company in offshore service provides high quality service offered with an affordable cost. Hence there is higher demand for the offshore software outsourcing in the market. The enterprise or other organization gets advantage in this service as they get skilled and talented team in affordable cost which is beneficial for the company growth and leverages many opportunities in their business. &n...

The global Software Development Outsourcing Services market, valued at $46.29 billion in 2025, is poised for significant growth. Driven by the increasing demand for agile software development, digital transformation initiatives across industries, and the cost-effectiveness of outsourcing, the market is expected to exhibit a robust Compound Annual Growth Rate (CAGR). While the precise CAGR is not provided, considering the strong market drivers and the prevalence of outsourcing in the tech industry, a conservative estimate would place the CAGR in the range of 8-12% over the forecast period (2025-2033). Key segments like Healthcare, Aerospace & Defense, and Retail & E-commerce are experiencing rapid growth fueled by their increasing reliance on sophisticated software solutions and data-driven strategies. Technological advancements in areas like AI, cloud computing, and DevOps are further accelerating market expansion. The outsourcing model, encompassing both technology and business process outsourcing, allows companies to focus on their core competencies while leveraging specialized expertise and resources from external providers. Major players like IBM, Accenture, Wipro, and Infosys are driving innovation and competition within this rapidly evolving landscape. Geographical distribution reveals strong market presence across North America and Europe, with significant growth potential in the Asia-Pacific region driven by India and China's expanding tech infrastructure and skilled workforce. However, challenges remain, including data security concerns, intellectual property risks, and managing potential communication barriers across geographical boundaries. Nevertheless, the long-term outlook for the Software Development Outsourcing Services market remains exceptionally positive, underpinned by sustained technological innovation and the continuous need for cost-effective and efficient software solutions across various sectors. Strategic partnerships, mergers and acquisitions, and continuous investments in emerging technologies will be critical for companies to maintain competitiveness in this dynamic market.

The global software outsourcing market is expected to reach a value of USD XXX million by 2033, expanding at a robust CAGR of XX% over the forecast period 2025-2033. The market is driven by factors such as the increasing adoption of cloud computing, the growing need for cost optimization, and the shortage of skilled IT professionals in developed countries. Major players in the market include Accenture, HCL Technologies, HPE, IBM, TCS, Oracle, Cognizant, Infosys, CapGemini, and NTT Data. The market is segmented by application into ERP, CRM, SCM, and others. The ERP segment is expected to hold the largest market share during the forecast period due to the increasing adoption of ERP solutions to streamline business processes and improve efficiency. By type, the market is segmented into onshore, nearshore, and offshore outsourcing. The offshore outsourcing segment is expected to grow at the highest rate due to the cost advantages offered by offshore destinations. The market is also segmented by region into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. North America is expected to hold the largest market share during the forecast period due to the presence of a large number of software outsourcing providers and the high demand for IT services in the region.

It Outsourcing is Witnessing Significant Growth Due To Digital Transformation, Driving Businesses To Rely More On IT Services Outsourcing for A Competitive Edge. IT Support Outsourcing Has Evolved Beyond Cost-Cutting, With Cloud Services Migrations Fueling This Shift. IT Managed Services, Particularly Application Development and Maintenance, are in High Demand, With Companies Like Slack and Alibaba Capitalizing On IT Offshoring. The Market is Highly Competitive and Fragmented, With IT Contracting, It Service Management, It Business Process Outsourcing, and IT Infrastructure Outsourcing Playing Crucial Roles.

This statistic shows the hourly wages for software outsourcing jobs in the United States in 2017, by title. Software architects in the U.S. had the highest hourly rates, ranging from 198 to 292 U.S. dollars in that year.

The summary statistics by North American Industry Classification System (NAICS) which include: operating revenue (dollars x 1,000,000), operating expenses (dollars x 1,000,000), salaries wages and benefits (dollars x 1,000,000), and operating profit margin (by percent), of software publishers (NAICS 51121), data processing, hosting, and related services (NAICS 51821), and computer systems design and related services (NAICS 54151), annual, for five years of data.

According to Cognitive Market Research, the global software development services market size was USD 402.9 billion in 2022 and will grow at a compound annual growth rate (CAGR) of 10.50% from 2023 to 2030. What are the Key Trends Driving the Growth of the Software Development Service Market?

Growth in Aerospace & Defence Sector to Propel Market Growth

The software development services market is experiencing rapid growth in the aerospace and defense sector. This growth is attributed to several factors. Firstly, there is a rising complexity in aerospace and defense systems. These systems are becoming more intricate, necessitating software solutions to manage and oversee their operations. Secondly, real-time data processing is crucial in aerospace and defense systems. These systems must be capable of instantaneously processing large amounts of data to make critical decisions. Lastly, there is an increasing utilization of artificial intelligence (AI) and machine learning (ML) in aerospace and defense systems. AI and ML technologies automate tasks, enhance decision-making, and identify anomalies.

The increasing demand for digitalization across various sectors is driving the growth of the software development services market

The demand for digitalization across the world is increasing as businesses demand innovation to transform their operations, adopt digital solutions, and leverage technology to stay competitive in today’s rapidly evolving world.

Rootstock Software announced the results of their sponsored study in May 2023. The study showed that even with inflation and other economic concerns, 75.2% of manufacturers who participated in the survey plan to increase their spending on software in the next 12 months. Additionally, 37.8% of those manufacturers plan on doubling their current spending.

(Source:www.rootstock.com/manufacturing-technology-survey/)

According to the European Commission (EC), by 2030, the world will experience a significant global shift due to industrial and technological advancements.

(Source:https://www.mdpi.com/1999-4893/16/4/211)

In 2017, the Organization for Economic Cooperation and Development (OECD) initiated a new worldwide project titled "Going Digital: Making the Transformation Work for Growth and Well-being." The project's aim is to assist policymakers in comprehending the digital revolution and developing a policy structure that fosters economic and social advancement in a world that is increasingly reliant on data and digital technologies.

(Source:one.oecd.org/document/DSTI/CDEP/GD(2017)2/en/pdf)

Many organizations and businesses have integrated advanced technologies such as Big Data analytics, IoT, cloud computing, and social media to improve their daily operations. As a result, demand for software development services is increasing which led to drive the growth of the software development services market.

The rising number of startups and growing tech industry boosting the software development services market growth

Startups are increasing across various sectors and they are known for their disruptive ideas and agile operations, which drives them to seek specialized software solutions in order to develop and deliver innovative goods or services. As a result, demand for software development services has increased significantly, leading to market growth.

According to the U.S. Bureau of Labor Statistics, entrepreneurs started 843,320 new businesses in the year ending March 2021.

(Source:www.bls.gov/bdm/us_age_naics_00_table5.txt)

According to data compiled by Fintrackr, in total, 1,327 startups raised $25.2 billion in 1,556 transactions.

(Source:entrackr.com/2023/01/indian-startups-raised-over-25-bn-in-2022-entrackr-report/)

A total of 5.4 million new business applications were filed in 2021 according to the Business Formation Statistics data from the U.S. Census Bureau.

(Source:www.census.gov/econ/bfs/pdf/bfs_current.pdf)

This increasing number of startups across the world is creating a demand for software development services which further drives the market growth.

Rising development of cloud technology will encourage further innovations and market growth

The Key Challenges that are Hindering the Growth of the Software Development Service Market

Shortage of Skilled Software Developers to Hinder Market Growth

The software development ind...

The Hospital Outsourcing Market estimated size and share is projected to exceed USD 1,017.93 billion by 2034, with a forecasted CAGR of 10.3% during the period.

The Software Outsourcing market has evolved significantly over the years, becoming an integral component of the global business landscape. With businesses continuously seeking efficiency and cost-effectiveness, outsourcing software development has emerged as a strategic solution that enables organizations to focus o

The IT outsourced on-site services market is experiencing robust growth, projected to reach $270.66 billion in 2025 and maintain a Compound Annual Growth Rate (CAGR) of 17.4% from 2025 to 2033. This significant expansion is driven by several key factors. Businesses are increasingly outsourcing non-core IT functions to focus on their core competencies, leading to a heightened demand for specialized on-site support. The rising adoption of cloud-based solutions necessitates skilled professionals for seamless integration and management, fueling the demand for on-site expertise. Furthermore, the growing need for data security and compliance necessitates robust on-site IT infrastructure management and support, further propelling market growth. Specific segments showing strong growth include software outsourcing and commercial applications, reflecting the increasing digitalization of businesses across diverse sectors. North America and Europe currently represent the largest market share, but rapid growth is anticipated in the Asia-Pacific region due to increasing IT infrastructure investments and digital transformation initiatives in emerging economies. The competitive landscape is characterized by a mix of large multinational corporations like Accenture, IBM, and Infosys, alongside smaller, specialized providers catering to niche markets. This diverse ecosystem ensures the availability of solutions tailored to varied business needs and sizes. However, challenges remain, including the potential for skill shortages in specific IT areas and the need for continuous adaptation to evolving technologies. The market's continued growth trajectory is expected to be influenced by advancements in artificial intelligence, automation, and cybersecurity, requiring service providers to continuously upgrade their offerings and expertise to remain competitive. The successful players will be those capable of leveraging emerging technologies to deliver cost-effective, secure, and highly efficient on-site IT services.

In 2021, Poland was regarded as a nearshore and offshore haven for software development outsourcing and clinched first place from Ukraine. Notably, Poland is ranked third globally for software development services.

The operating expenses by North American Industry Classification System (NAICS) which include all members under industry expenditures, for software publishers (NAICS 51121), annual (percent), for five years of data.

The IT Outsourcing market, valued at $525.63 million in 2025, is projected to experience robust growth, driven by the increasing adoption of cloud computing, the rising demand for digital transformation initiatives across various industries, and the persistent need for cost optimization among businesses. The market's Compound Annual Growth Rate (CAGR) of 4.5% from 2025 to 2033 indicates a steady expansion, with significant opportunities emerging in segments like infrastructure outsourcing and application outsourcing. North America and Europe are expected to remain dominant regions, fueled by strong technological advancements and a mature IT infrastructure. However, the Asia-Pacific region is poised for significant growth due to rapid economic development and increasing digitalization efforts in countries like China and Japan. Competitive forces within the market are intense, with established players like Accenture, IBM, and TCS vying for market share against a dynamic group of emerging players. These companies employ diverse competitive strategies such as strategic partnerships, mergers and acquisitions, and the development of innovative solutions to cater to evolving customer needs. While factors like data security concerns and potential geopolitical instability represent challenges, the overall market outlook remains positive, propelled by the continuous need for businesses to leverage external IT expertise to enhance efficiency and competitiveness. The IT outsourcing market's segmentation into infrastructure and application outsourcing highlights distinct market dynamics. Infrastructure outsourcing, encompassing services like data center management and network support, benefits from the ongoing shift towards cloud-based solutions and the need for reliable, scalable IT infrastructure. Application outsourcing, which includes software development, maintenance, and testing, is driven by the increasing demand for customized software solutions and the need for businesses to focus on core competencies. The leading companies in this market are strategically investing in research and development to offer cutting-edge solutions, including Artificial Intelligence (AI) and Machine Learning (ML) based services. This commitment to innovation, coupled with a focus on delivering high-quality services, is crucial for maintaining a competitive edge and securing long-term success in this dynamic and ever-evolving market.

India IT Industry Revenue: USD: Business Process Outsourcing data was reported at 34.800 USD bn in 2019. This records an increase from the previous number of 32.000 USD bn for 2018. India IT Industry Revenue: USD: Business Process Outsourcing data is updated yearly, averaging 21.099 USD bn from Mar 2007 (Median) to 2019, with 13 observations. The data reached an all-time high of 34.800 USD bn in 2019 and a record low of 8.667 USD bn in 2007. India IT Industry Revenue: USD: Business Process Outsourcing data remains active status in CEIC and is reported by National Association of Software and Service Companies. The data is categorized under Global Database’s India – Table IN.TF005: Information Technology Statistics: National Association of Software and Service Company: IT-BPM: Industry Revenue.

The Engineering Services Outsourcing Market estimated size and share is projected to exceed USD 49.05 billion by 2034, with a forecasted CAGR of 26.9% during the period.

The IT outsourced on-site service market, valued at $833.3 million in 2025, exhibits significant growth potential. While the provided CAGR is missing, considering the robust expansion in the broader IT outsourcing sector and the increasing demand for specialized on-site expertise, a conservative estimate of 7% CAGR for the forecast period (2025-2033) is reasonable. This implies a substantial market expansion driven by factors such as the rising adoption of cloud-based solutions necessitating specialized on-site support, the growing need for enhanced cybersecurity measures, and the increasing complexity of IT infrastructures requiring hands-on expertise. The segment breakdown reveals a strong demand for both personal and commercial application outsourcing services, with software outsourcing constituting a major portion. Key players like Accenture, IBM, HCL Technologies, and Infosys are strategically positioned to capitalize on this growth, leveraging their global presence and extensive service portfolios. The regional distribution likely reflects established IT hubs like North America and Europe holding larger market shares, followed by Asia Pacific, driven by burgeoning economies and increasing digital adoption. However, emerging markets in the Middle East & Africa and South America offer untapped potential for future growth, particularly as digital transformation initiatives accelerate across these regions. The sustained growth within the IT outsourced on-site service market is further propelled by several trends. The shift towards hybrid work models creates a need for seamless on-site support integrating with remote IT services. This necessitates skilled professionals proficient in both on-site troubleshooting and remote management. Furthermore, the increasing focus on data privacy and security is driving the demand for specialized on-site security audits and compliance services. The adoption of advanced technologies like AI and machine learning will also impact this market segment, requiring skilled professionals to implement and maintain these solutions on-site. Despite this positive outlook, potential restraints such as fluctuating labor costs, the ongoing talent shortage in specialized IT roles, and potential economic downturns could influence market growth trajectories. Nevertheless, the overall market outlook remains promising, driven by persistent growth in IT spending and the ongoing digital transformation across various industries.

North America Healthcare IT Outsourcing Market size was valued at USD 21,847.16 Million in 2023 and is projected to reach USD 38,838.27 Million by 2030, growing at a CAGR of 7.68% from 2024 to 2030.

North America Healthcare IT Outsourcing Market Definition

Healthcare IT outsourcing is the process of hiring an outside company to help an organization with some of its IT and business requirements. This collaboration allows healthcare companies to outsource certain IT jobs, services, or projects to subject-matter experts, freeing them up to focus more on patient care and their core services. The outsourcing agreement can include a wide range of IT services, such as infrastructure management, cybersecurity, network maintenance, software development, and data management. By using the knowledge of external partners, outsourcing healthcare IT operations aims to improve patient care and services within the healthcare sector, reduce costs, improve technological integration, and promote operational performance.

A wide range of technology can be outsourced to third-party vendors by healthcare providers. These consist of setting up telemedicine and remote patient monitoring programs, using specialist medical billing and coding software, managing Electronic Health Record (EHR) systems, maintaining IT infrastructure (servers, networks, etc.), and protecting patient data with cybersecurity and data protection services.

European software developers' revenue is forecast to drop at a compound annual rate of 2.8% over the five years through 2024 to €374.1 billion due to challenging economic conditions. Software development revenue has been supported by rising digitisation and technological developments throughout the continent. The industry has been characterised by acquisitions, as global developers have sought to remain on top of market trends and protect their competitive positions by acquiring smaller businesses, particularly niche developers. While revenue tumbled in 2020 amid the pandemic, the industry was less affected than the wider European economy due to the essential nature of most software provided by developers and the digital nature of the industry. Demand for cloud-based and business operation software surged due to lockdowns across the globe, which led to a rise in remote working in Europe, with the Netherlands and Luxembourg having embraced remote-working the most. Revenue is set to contract by 2.2% in 2024 amid economic headwinds. Profit has remained high but has trended downwards. Over the five years through 2029, revenue is forecast to grow at a compound annual rate of 3.3% to €440.2 billion. Continued technological developments, including artificial intelligence, and the rising application of advanced software in businesses will stimulate demand. Heightened demand from the European Fintech space will be influential for developers, as the EU has established a strong regulatory framework to encourage growth.